Index Archive

18 July 2015

Louis Berger paid $976,630 bribe to win Goa Project paid bribe to Indian Minister
Louis Berger International, Inc. ("LBI"), was a company incorporated under the laws of New Jersey and, thus, a "domestic
Concern" as that term is used in the FCPA, Title 15, United States Code, Section 78dd-2(h) (l) (B).

LBI was a wholly-owned subsidiary of Berger Group Holdings, Inc. ("BGH"), and as part of a corporate restructuring assumed responsibility for all international operations and liabilities of BGH previously conducted by other BGH subsidiaries or affiliates (hereinafter collectively referred to as "the Company"). The Company was a privately-held consulting firm that provided engineering, architecture, program and construction management services.

Louis Berger International Inc. (LBI), admitted to violations of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a $17.1 million criminal penalty to resolve charges that it bribed foreign officials in India, Indonesia, Vietnam and Kuwait to secure government construction management contracts.

Two of the company’s former executives also pleaded guilty to conspiracy and FCPA charges in connection with the scheme.

LBI agreed to pay a monetary penalty in the amount of $17,100,000 to the United States Treasury.

The Company, through its agents and employees, together
with others, while in the District of New Jersey and elsewhere, would and did discuss in person, via telephone and via electronic mail ("e-mail") making bribe payments to foreign government officials, including foreign government officials in India, Indonesia, Kuwait and Vietnam to secure their assistance in awarding business to the Company.

The Company, through its agents and employees, together with others, while in the District of New Jersey and elsewhere, would and did use
terms like "commitment fee," "counterpart per diem," "marketing fee," and "field operation expenses" as code words to conceal the true nature of the bribe payments and by utilizing cash disbursement forms and invoices which did not truthfully describe the services provided or the purpose of the payment.

Richard Hirsch, 61, of Makaati, Philippines, and James McClung, 59, of Dubai, United Arab Emirates, each pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA. Hirsch previously served as the Senior Vice President responsible for the company’s operations in Indonesia, Thailand, the Philippines and Vietnam. McClung previously served as the Senior Vice President responsible for the company’s operations in India and, subsequent to Hirsch, in Vietnam.

The sentencing hearings for Hirsch and McClung are scheduled for Nov. 5, 2015.

According to admissions in the DPA and statements in the charging documents, from 1998 through 2010, the company and its employees, including Hirsch and McClung, orchestrated $3.9 million in bribe payments to foreign officials in various countries in order to secure government contracts. To conceal the payments, the co-conspirators made payments under the guise of “commitment fees,” “counterpart per diems,” and other payments to third-party vendors. In reality, the payments were intended to fund bribes to foreign officials who had awarded contracts to LBI or who supervised LBI’s work on contracts.

Corrupt Conduct in India – LBI

On or about December 30, 2009, a consortium partner sent an e-mail to agents of the Company, stating, "I enclose the working for the shares between the firms for the Goa Project. Pls go through the same and we could discuss. Pls see the sheet 'Master."'

The company has operated in India since 1998 and had offices in Guragon, Mumbai, Chennai and Hyderabad.

Along with several consortium partners the company won two water development projects in Goa and Guwhati. The company paid bribes to win both those contracts.

The bribe money was disguised as payments to vendors for services that had never actually been rendered.

The company through its employees and agents and its consortium partners kept track of the bribe payments by a circulating a spreadsheet amongst themselves showing the proportionate share of each bribe that they had paid to the foreign officials overseeing their work on the Goa and Guwhati Projects.

On or about August 17, 2010, a consortium partner sent anE-mail to James McClung, stating, "As discussed I enclose the details as provided by [third-party intermediary]. I have also added the details of amounts paid to [the Company] as of date by [the consortium partner] in the same sheet." The attachment included an entry, "Paid by [an agent of the Company] to Minister on behalf of agent."On or about August 26, 2010, a consortium partner prepared a payment tracking schedule stating that the Company had paid $976,630 in Bribes in connection with the Goa Project to date.

Corrupt Conduct in Vietnam –

On or about August 1, 2003, a draft invoice to the Company
Was created on the computer used by Richard Hirsch's assistant, which
Purported to invoice the Company for an amount due of $18,000. •

On or about August 1, 2003, an identical invoice to the one
Described in Overt Act (13) above, in the same amount of $18,000, but on the letterhead of the Foundation, was submitted and approved by defendant Richard Hirsch for the purpose of passing on bribe money to government officials in Vietnam.

In or around 2005, as James McClung assumed responsibility
For Vietnam, Richard Hirsch explained to James McClung that Mcclung would need to find a new way to generate bribe money for foreign officials because the Foundation would soon cease operations.

On or about March 10, 2005, an agent of the Company sent a
Memorandum to another agent of the Company stating, "My personal
observation is that the members of the Evaluation Committee is [sic] giving [the Company] a hard time at this point in time, to force [the Company] to a 'commitment fee', which was customary in our old Vietnam projects, like [a prior project] for instance."

On or about February 9, 2007, an employee of the Company
Sent an e-mail stating, "I need a detailed info on which proposals work is being done for as well as descriptions of other staff invloved [sic] in this. 25K is a handsom amount of money and more information is required."

On or about February 10, 2007, an employee of the Company
Responded to the e-mail referenced in Overt Act above, stating, "I am ok to tell you what is to be paid for. But I am thinking whether it should be written throw e-mail or not. So I think better [a Company employee] will tell you today."

On or about February 10, 2007, an employee of the Company
Responded to the e-mail referenced in Overt Act (18) above, stating, "No problem with detailed description-but probably not via e-mail message. I'll contact [James McClung] via telephone or sms. Could you please check with [James Mcclung], say Sunday evening, and process the fund request."
On or about February 3, 2008, an employee of the Company
Sent an e-mail to a regional accountant and others stating, "I'll be requesting personal advance from Bangkok office (THB equivalent to about US$13,000). [James McClung] has approved this request."

Corrupt Conduct in Kuwait –

On or about September 8, 2010, a local joint venture partner
To the Company sent an email to a high-level executive at the Company as
Follows: Yesterday the cheque of KD 10,000 was credited in
[Kuwaiti government official's] co. Which is a part/installment of KD 40,000, the rest will be followed by intervals of KD 10,000 on weekly bases [sic]. All the above was conveyed & noted to [the Kuwaiti government
Official] & he agreed.